The advice column in the url below addresses the issue of a firm’s responsibility for its extended supply chain (Issues: Cultural Conflict, p160). It cites two recent examples in the UK (Primark and Tesco) where evidence suggests a systematic abuse of human (child laborers) and employment (low pay) rights in factories that supply both firms. The column then asks for advice from four different perspectives in response to the following questions:
“Is it ever possible for companies with suppliers in developing economies to guarantee that their goods have been produced in ethically acceptable conditions? And what kind of audit system could provide consumers with such a guarantee?”
In relation to the first question, I was pleasantly surprised to see the position taken that consumers shouldn’t be surprised when they pay such relatively low prices for clothes that it then emerges that the clothes did not cost much to produce:
“Consumers massage their consciences, crying crocodile tears when an abused producer is found by an intrepid journalist, but show their true colours shopping for underwear.”
In addressing the second question, the general response was also refreshing (in terms of its perceptiveness), suggesting that (a) firms should not be surprised that suppliers in developing countries try and deceive auditors and (b) that they only have themselves to blame because, while firms might say that they want their suppliers to adhere to certain standards, they incentivize them to minimize costs. Until firms become serious about providing financial incentives for suppliers to adhere to their codes of conduct and punish transgressors, they are unlikely to see the kind of behavior they say they seek:
“That means engaging the supply chain in good corporate social responsibility practices rather than relying on spot checks. It means getting suppliers to recognise that adhering to sound employment practices is in their own interests and helping suppliers develop policies and practices that will make them a trusted supplier and build a long-term relationship.”
The absence of a choice for many workers in the developing world is also a point well made:
“Poor parents in India, Pakistan or Vietnam cannot choose between sending their children to a school or a factory. The real choice is between eating or going hungry.”
The upshot is that the column does not provide many specific answers, but at least everyone is realistic in terms of the situation on the ground.
Take care
Dave
Bill Werther & David Chandler
Strategic Corporate Social Responsibility
© Sage Publications, 2006
Moral maze for retailers reliant on developing world suppliers
872 words
2 July 2008
Financial Times
London Ed1
16
http://www.ft.com/cms/s/0/f5771c20-47d0-11dd-93ca-000077b07658.html
